Welsh Committee report backs NRLA calls for clearer definition of second homes

The Senedd’s Local Government and Housing Committee has published its report following its inquiry into Second Homes in Wales.

The Committee has made 15 recommendations to Welsh Government, including the NRLA’s call for the use of consistent definitions of what ‘second homes’ are when designing policies.

In our consultation response, we made it abundantly clear that the Private Rented Sector should not be caught up in any legislative changes aimed at restricting the number of second homes.

This means that the committee agrees with us that private landlords should not face council tax premiums of up to 200% unlike those property owners who have invested in holiday lets.

A clear definition – defined perhaps through planning legislation or by the number of days continuously let – may sound like common sense, yet we have become alarmed by conversations we have had over what a second home is.

Some communities in Wales have very high numbers of second homes used specifically for holiday lets, including Abersoch where the committee highlighted that around 96% of housing stock was made up of holiday lets, there is understandably concern across the Senedd.

In areas like Abersoch, or any other area with a high proportion of holiday lets, Buy to let landlords play a very important role in providing housing options for young people and the vulnerable.  Any further legislation towards landlords will only serve to further reduce many groups housing options. 

With such staggering barriers to housing for young and vulnerable people, isn’t it about time local authorities located in areas of high tourism engaged with PRS landlords?

Social housing supply in Wales is far outstripped by demand and mortgages well off limits for many, we called for a local authority to engage with landlords and consider:

• Grants or interest-free loans for those landlords who take on empty homes and increase supply.
• Improving access to the PRS for vulnerable people by local authorities working with landlords and reducing the risks by providing guaranteed rents and bonds.
• Levelling up the ‘playing field’ between PRS landlords and holiday let owners by HMRC recognising landlords as self-employed and given them great access to business rate relief and grants.

We also raised caution with the committee, that by increasing the higher rate of Land Transaction Tax would be more likely to deter investors from purchasing property to let through the private rented sector than it would purchasers of second homes or investors in the short-term lettings market.

The higher levels of legislation and increased costs for landlords is one of the primary reasons why some landlords are considering leaving the sector and buying holiday lets in the first place.

This is a message that we will continue to purvey to the Welsh Government along with a call for a more positive relationship with landlords.